Apple Raises E-book Prices For Everyone 327
Nom du Keyboard writes "I was informed by my publisher this week that they would have to raise my e-book prices because they planned to sell them through the Apple iBooks store. How could this happen? A lot of my individual stories sell in the $1 to $3 range, which is well within the impulse purchase amount for many people. In this price range a 50-cent price difference may well be the difference between a purchase and a pass. Meanwhile, Apple is touting its new 'agency model,' whereby the publishers set the prices. However, it seems that Apple requires books sold in its iBook store have prices ending in .99 — nothing else." (More below.)
"Furthermore, Apple requires that if you sell books through them that you absolutely cannot sell them for less through anyone else. To my understanding Amazon also requires this, so Apple and Amazon prices should be identical in the future, but Amazon doesn't force prices to end in .99. What this means is that an e-book that the author was quite happy to sell for $2.29 or $2.49 is now going to cost $2.99 from everybody. While that sounds like only a few extra cents, it adds up over time and can lead to resentment against authors for charging higher prices, even though they have little real control over pricing. I, for one, do not understand why Apple computers only understand numbers ending in .99, or just how Apple is making it better for the consumer this way."
Meh ... Its Apple .. you expected different? (Score:3, Insightful)
I thought we'd all be used to spending more money for the same thing because Jobs slapped his gay little Apple logo on it.
Re:Meh ... Its Apple .. you expected different? (Score:5, Insightful)
The problem is that Apple has and Amazon will shortly have a "you can't sell your book for cheaper at other ebook stores" clauses in their agreements. (The Amazon one is part of their newer pricing model, which matches Apple's 70% cut but adds restrictions on pricing, which should go into effect this summer.)
A hypothetical:
You've been selling your ebook on Amazon, and you've done some pricing experiments. You've found that you sell half again as many books at $2.49 than you do at $2.99, and the volume more than makes up the difference, so you set your price accordingly. In order to expand to the iBookStore, you must price your book at $2.99 there, and take the hit in sales. But wait! Apple will refuse to sell your book if you're selling for cheaper on Amazon, so you have to raise your price to $2.99 at the Amazon store as well.
So, now all your customers are paying more, even the ones who are not buying from Apple, and you have fewer of them. You are not making as much money, and neither are any of the distributing companies that make their money by taking a cut off yours. Everyone loses, all for the sake of a nice round (?!) number.
Re:Meh ... Its Apple .. you expected different? (Score:5, Insightful)
Except you might make more money if you drop the price to $1.99 and now sell in 2 marketplaces instead of one. Who says that the price adjustments have to be positive?
If Amazon really wants to fuck with Apple they'll force their pricing to end in .98 which would mean that books on iTunes would be $1.01 more (until Apple adjusted their pricing to .97)
Whatever. I'm heading down to the Apple store to get a new 3g iPad and hit In-n-Out for a Double Double. Cheers.
Re: Price elasticity of demand (Score:5, Informative)
http://en.wikipedia.org/wiki/Price_elasticity_of_demand [wikipedia.org]
Re: (Score:3, Interesting)
So selling at $1.99 means forgoing revenue...
selling at $1.99 in one market place.
I've worked for a large software company and we used to analyze this all the time. It is exceedingly difficult to account for all the variables. Did he, for example control for seasonality? Did he try to calculate if the potential additional sales from another marketplace would offset or erase the potential loss?
Obviously if he simply lowered the price in the Amazon store (my assumption) he would leave money on the table based on the information provided. But that is
Reading comprehension fail (Score:2)
Try it again.
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In the parent post it says the author did some trials and found out $2.49 was the price where he made the most profit. At a lower price, enough new customers weren't created to offset that lower price. A higher price caused customers to chose not to buy. Profit was optimized. So selling at $1.99 means forgoing revenue, as would selling at $2.99. Now if parent didn't say they had experimented with pricing, either pricing higher or lower could end up creating more revenue.
If only it weren't mandatory to sell on the Apple store. Oh wait, it isn't, and he can keep selling as he is now. Seriously, this guy is bitching because he wants to add another retailer, but doesn't like their rules - DON'T FUCKING ADD THEM THEN.
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The problem is that Apple has and Amazon will shortly have a "you can't sell your book for cheaper at other ebook stores" clauses in their agreements.
Isn't this Price Fixing? Isn't that illegal?
Re:Meh ... Its Apple .. you expected different? (Score:4, Insightful)
No, it's not. It would be price fixing if Amazon, Apple et al got together and set the minimum price to ensure profits, but this is more like a low price guarantee, and besides the publishers set the prices for the most part anyway.
I think the premise of the article is wrong and I don't think the author understands economics that well. I think that while we might see higher prices on specific or new e-books, having Apple and Amazon competing will drive the prices down as they compete for market share.
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Happily, in Australia it's known as third-line forcing and it's totally illegal. So when we finally get the iPad, Apple are going to have some interesting conversations with our competition commission.
Re: (Score:3, Informative)
I don't think this situation meets the definition of third-line forcing.
Third line forcing occurs when a supplier places a condition on the supply of its goods or services that the customer must acquire goods or services of a particular type from a third person nominated by the supplier. http://www.mallesons.com/publications/2005/Nov/8201946w.htm [mallesons.com]
Anyway Amazon and Apple will need to answer those questions.
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You are absolutely correct. Sorry.
However, the ACCC also has powers to stop resale price maintenance [accc.gov.au]:
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Erg. Actually, if Apply is the reseller and the software maker is the supplier, then this is all arse-backwards. Guess this also doesn't apply!
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Doesn't understand economics well? What the heck are you talking about. This doesn't require a fancy degree in economics to understand. Apple is shoving its bs down his throat and the result is that he has to increase the price across the board to maintain the same target audience. Which is assinine.
Smells like price fixing to me. "We refuse to allow you to sell your product at the price you want to sell it at" is price fixing. This is anticompetitive behavior at its finest. We won't carry your produc
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Wow, who shit in your cheerios?
The point is that the analysis that is lacking from his post is, will a lowering of the price to $1.99 while at the same time making the app available in another large marketplace net him more money. I don't know the answer to that, and apparently neither does he.
Your example is not that relevant to the point. In the stock market, the price is (supposed) to be set solely by the people buying ans selling stocks - the price finds its own level. In retail the seller decides the
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Safeway and Sears let producers set prices all the time (more or less). Or do you think everything costs the same and then the retail store chooses a bunch of different prices? Producers set the price they sell their product at. The store buys it, applies their own markup, final consumer price. Producer raises price? Price generally goes up. Producer lowers price? Who knows...depends on sales contract between producer and store.
But that's really all irrelevant because in this model, the store doesn't
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Oh, and because it "smells like price fixing to you" it must be. Not really: "Price fixing requires a conspiracy between two or more sellers or buyers;"
http://lmgtfy.com/?q=price+fixing
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Except that the pool itself enlarges due to the increased number of sales outlets, which should also increase sales.
For example, if the pool on Amazon was 100, and you saw 20 sales at $2.99 for a profit of $59.80, and 30 sales at $2.49 for a profit of $74.70, yes; you are making more at $2.49.
Then Apple joins in. Let's say Amazon's pool is now 90 (some will leave Amazon for Apple, but not all, nor even likely half.) And Apple's is 50, half the previous Amazon's. So you now have a TOTAL pool of 140. Same
Re: (Score:3, Interesting)
Also, while you were selling on Amazon at $2.49, they were taking a 70% cut. (74 a copy to you)
Now you're selling on Apple AND Amazon, and they're both taking a 30% cut. If you drop your price to $1.99, you're still taking home almost twice as much at $1.39 a copy, and you're reaching a larger market, and you're selling more at a lower price. Also, not only do you have a second storefront, but there's now a boatload of iPads floating around with the Kindle app too, so even Amazon's market just grew some.
Less maybe? (Score:5, Insightful)
Because you obviously couldn't charge $1.99 for that book both places?
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Great way to get out of paying Apple the remainder though.
Sell it for $X.99 means they don't get it themselves ...
Meh. (Score:5, Informative)
Almost all my ebooks come from Baen. They may cost a little more, but they are 100% free of Apple-style dickery, including DRM.
Re:Meh. (Score:5, Informative)
I'm proud to say that all my ebooks are drm-free, too, and that's because I bought most of them at Baen as well. I went there for the free ebooks, originally. They were good enough that I started buying there as well. I haven't been disappointed. (Of course, being able to properly preview a book on their site hasn't hurt, either.)
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You know why we can't watch any TV or Movie through iTunes? The content providers.
You know why we have DRM on iTunes? The content providers
You know why prices go up on iTunes? The content providers
Get sick and tired of people bitching about this, blaming Apple entirely. It's just not true.
Re:Meh. (Score:5, Interesting)
Whoever the blame lies with, my choice is the same - I don't buy DRM.
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You have a point in general, but in the context of eBooks, who is the content provider? Seems to me it's the guy bitching he can't sell his books for less. I think blaming the Cult for this is completely reasonable.
Re: (Score:3, Insightful)
"Content provider" is a euphemism for publisher, to make it seem like they represent the actual creators. (And they actually do an important job — just look at the low quality of even the best blogs to see how important actual editors are — but most of these newfangled expressions are made up only to confuse.
Re:Meh. (Score:4, Informative)
The DRM-less iTunes tracks still have lots of private tracking information inserted into them. Further, Apple still maintains a relatively closed system. So while it's not DRM, per se, it is evidence that Apple prefers to have control. It's not just content providers. It's content providers and Apple, working sometimes together, sometimes at odds, to ensure content control, with the end user in very last place when it comes to personal control over content.
Re:Meh. (Score:5, Insightful)
What's wrong with that? Remember, the legitimate argument against DRM on commercial media is that it gets in the way of a user making legitimate use of media that he has bought. For example by stopping him making backup copies or playing the media on multiple devices. Having your identity embedded in the media metadata doesn't get in the way at all.
Re:Meh. (Score:5, Informative)
Re: (Score:2)
Don't be afraid of a little self promotion. I like supporting authors and publishers that aren't dicks.
What are your books and who is your publisher?
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Amazon does allow publishers to provide books without DRM, though there is no indication to the buyer of this... I've only noticed it trying to strip the DRM and discovering that there was none to strip.
So, yes, if it's on Amazon with DRM, that's the publisher's choice.
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Get sick and tired of people bitching about this, blaming Apple entirely. It's just not true.
What part of
Apple requires that if you sell books through them that you absolutely cannot sell them for less through anyone else.
and for that matter
Apple requires books sold in their iBook store have prices ending in .99
did you not understand?
Also, this is not about iTunes. It's about iBookStore.
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If I were willing to put a bumper sticker on my car, I would need to get one that says this. A T-shirt might do.
Ridiculous (Score:3, Funny)
I'm really beginning to hate Apple. I'm in the process of putting together a manuscript and I would not agree to have it put in the Apple store just on this issue.
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Well, hate them more I should say.
There are other reasons to hate Apple (ridiculously high prices, closed platform, etc.) but this one is the straw that broke the camel's back.
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What they're doing (Score:4, Funny)
Yeah, this sucks.
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Clark and Superman fight for control after the synthetic green Kryptonite fails to kill him, too.
And the gift cards always end in a .00 (Score:3, Insightful)
Which makes no sense to me. Apple gets to keep all of those pennies...
Time to find a new publisher? (Score:2)
It sounds like the problem is really between you and your publisher, not between you and Apple. It may be time for you to find a publisher that shares your position on the situation, because it doesn't sound like your publisher does.
Re: (Score:3, Insightful)
It sounds like the problem is really between you and your publisher, not between you and Apple. It may be time for you to find a publisher that shares your position on the situation, because it doesn't sound like your publisher does.
Did you RTFA? This is Apple's policy, not the publisher's. His options are:
1) Raise his prices across the board
2) Lower his already-low prices across the board
3) Lower his prices on the Apple iBooks store to below the prices on other stores
4) Not make his books available to iPad users
His publisher has chosen option 1 for him, but if he wanted to go with one of the other options, I'm sure an agreement could be reached. The problem is that none of these options are desirable.
Re:Time to find a new publisher? (Score:5, Insightful)
Did you RMFP?
The publisher made a decision the poster disagrees with. If it's a big enough deal then the poster should find a new publisher that refuses to sell through Apple until Apple changes their policy.
Bitch all you want (Score:3, Insightful)
This is ridiculous , you perfectly know how Apple operates, so either conform to their wish or say to hell with you Jobs, I am taking my business elsewhere.
My speculation (Score:3, Insightful)
I, for one, do not understand why Apple computers only understand numbers ending in .99, or just how Apple is making it better for the consumer this way.
Two thoughts come to mind:
1) Possibly, it's just for uniformity sake. When all the prices end in the same digits it might appear to Jobs that it looks cleaner in the store app?
2) It could also be to prevent snowballing pricing wars (thus keeping the costs of e-books somewhat buoyant which doesn't help the consumer at all). For example, publisher A lists a book for $1.99; publisher B lists a similar competing book for $1.97; publisher A strikes back pricing their book at $1.89, etc. This behavior is discouraged, if the publisher has to drop the books price by $1.00 when the price is only $1.99.
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Except the higher quality DRM free iTunes files are $1.29? Or they were...
I think reason #2 is spot on.
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And 3) Because of consumer's preference for certain price points, and it's link to international markets. If the price in other markets were simply linked to the exchange rate, then it would fluctuate up and down at whatever frequency Apple chose to update the prices. And all prices would be at weird numbers. A £3.43 price for example. Rather than that, Apple set up tiers of price points.
A = 99c or 59p etc.
B = $1.99 or £1.19 etc.
C = $2.99 or £1.79 etc.
I wish the .99 gimick would die in a fire, now (Score:2, Insightful)
I truly hate the .99 gimick. I actually wish they'd roll tax into the prices so what you see on the label is what you pay and its a nice round number $X.10 $X.20 $X.50 $X.00. Worse is the stupid gas stations with 9/10's of a cent. Why is it they can charge a fraction of a penny you can't possibly pay, ensuring they skim 10ths of a cent gazillions of times. I think they did that in Superman III or something. How is it after all these years, they're still stealing money?
Re:I wish the .99 gimick would die in a fire, now (Score:4, Insightful)
I want to see a constant reminder of how much of my money is going to taxes with every transaction and on every receipt. As soon as taxes get rolled into price tags, they become less visible and easier to jack up. Same reason income tax withholding is evil - people lose track of how much is being stolen and get excited just to have the government give some of their money back to them.
Re: (Score:2)
I want the tax included on the tag for convenience, but I also want it called out on the receipt for honesty.
Re:I wish the .99 gimick would die in a fire, now (Score:5, Insightful)
Why not just be honest and stop pretending that the money that was "taken" in tax was ever yours to begin with? Without the tax the system wouldn't work and you wouldn't have been able to earn the money. Such is the way of the world and it might as well be accepted.
I'd happily pay slightly higher prices to have the tax included in the quoted price, too. If they also (as in the UK) display the charged tax on the receipt so much the better. The same can be true of service, if they like. Quote all service charges in the prices of the food and stop using "tips" as an artificial way to have higher food prices. If necessary, say on the receipt that a proportion of the food charge was specifically for carrying it to you as opposed to cooking it, which for whatever reason is already included.
The 0.99 gimmick should absolutely die, though, irrespective of whether tax is going to be added on or not.
Re: (Score:3, Informative)
But it's not slavery. If you weren't paying the taxes you simply wouldn't have the income to not pay from. The entire system would collapse. You'd have no roads to go to work on, no police to stop what you do have being stolen, no laws to prevent the company from exploiting you, no economic stabilisation to stop inflation running out of control and making your income worthless. You simply can't look at the gross income and claim that tax is theft from it, that's ridiculously naive.
Re:I wish the .99 gimick would die in a fire, now (Score:4, Funny)
Re: (Score:3, Interesting)
You can't give people freedom, you can only help them to free themselves.
The problem with pointing to failed stated like Rwanda or Somalia as examples of why anarchy doesn't work is that they're full of people who didn't set themselves free. They're slaves who were unfortunate enough to have had their masters disappear on them, with the predictably ensuing chaos.
A people who choose for themselves to live as a society based on relationships of mutual consent and free of coercion would be an entirely differen
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all income tax is evil, we are working for the govt, ie the masters and we are the slaves.
It used to be that income taxes never existed, until the evil corp/govt entities came about.
The only reason for income tax was to pay for the war, but then it got convenient and hooked like a druggie on heroin.
Re: (Score:3, Informative)
You can have both. In Germany, the price is the price. No surcharges. No surprises.
OTOH, at a few gas stations I've been too there, they had huge stickers near the price displaying reminding me how much money off of every liter went straight to the government. One even had a breakdown on the reciept.
Both requests can be met.
Are You Sure? (Score:2, Informative)
You're blaming Apple for your publisher raising prices even though you admit it's the publisher setting the price?
However, it seems...To my understanding...
It seems like maybe you're hearing things kinda third-hand and sorta don't have direct knowledge of what might be going on between Apple and your publisher, doncha think?
Don't have to sell through iBooks (Score:3, Insightful)
About the only reason to sell through iBooks is that Apple is very good at marketing and riding on Apple coat tails could increase sales. The fear, as I get from the submission, is no one would buy any of these books if read some of it first, so the only hope is to sell it so cheaply that people will just read it, and not feel ripped off when they find out it is crap. The solution, then, is obvious. Write book that people are willing to pay for.
So it is not Apples fault or Amazons fault that the price is going up. There is no reason at all for anyone to sell books through them, except that Amazon, and soon Apple, are going to be selling a lot of books and both have already set up infrastructure and pay for advertising that is unfeasible for most authors. But that only matters to authors who want to sell a lot of crap. For the author in question, who obviously cares much more about the fact that Apple is out to rip off the public rather than volume sales, I think DRM free ebooks or Apps is the answer.
Re: (Score:3, Informative)
There are, in fact, many ways to buy a book for the Kindle and (even moreso) the Nook; both, in addition to supporting DRM-laden purchases from the device vendors own e-bookstore, support content in a variety of DRM-free formats (a slightly wider variety on the Nook) acquired outside the vendors e-bookstore.
And plenty of publishers with their own online bookstores make ebooks available DRM-free in
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Quite so. Except for one or two experimental purchases, all of the 2-300 ebooks I've purchased, first for my Sony Reader, and for the last year or so, Kindle, have been DRM-free. Mostly from fictionwise.com, some from Baen. OK, and since around Christmas, a handful of Kindle books now that they can be fixed easily, though I still avoid them on principle.
Not true, also more ways to read (Score:2)
The only "advantage" the iPad has in terms of more ways to buy books is that, since it can run different vendors e-bookstore apps, you have more ways to buy DRM-laden books from competing vendors.
But you can also take the DRM free PDF files and use them in either the Kindle app, or iBooks, or actually a ton of other offline readers.
One big advantage the iPad has going for it is a very diverse array of readers.
Blah... (Score:3, Informative)
I, for one, do not understand why Apple computers only understand numbers ending in .99...
It's a math fixation... row one, column two [xkcd.com]. Mind you I don't get it either ln(2*pi) is much more challenging.
Gonna sound snarky.... (Score:4, Interesting)
... but I'm genuinely interested: What exactly does a publisher of e-books "publish"?
I'm serious. You've written the book, you've put it in whatever form you decided on. I understand that you need some vehicle to distribute it -- isn't that what Apple and Amazon are doing? So what is your publisher doing? What value does he/she/it add?
Re:Gonna sound snarky.... (Score:5, Informative)
The vast majority of texts that authors give us are incredibly poor. Our editors have an extremely hard job of cleaning these up and rewriting them so that they are generally understandable and professional and are correctly targeted for our audience. To our established authors, we also offer them an advance on their work.
Even if it's just ebooks, getting it into all the available distribution channels and formats for the various stores requires a high level of technical competence, this is likely more than a lone writer wants to learn.
Of course they could pay someone independently to do this for them, just as they could pay someone independently to edit the book. It is a trade off and while some authors will prefer doing it alone, some(many) prefer the relative security of going through an established publisher who has existing links to distributors, printers, editors and the technical know-how to get it into the required formats to ensure the maximum market for the book.
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Don't forget the proper formatting and typesetting (even in ebooks), else they look like crap. Many of the "free" options, or very low cost books like much like badly photocopied political pamphlets.
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... but I'm genuinely interested: What exactly does a publisher of e-books "publish"?
I'm serious. You've written the book, you've put it in whatever form you decided on. I understand that you need some vehicle to distribute it -- isn't that what Apple and Amazon are doing? So what is your publisher doing? What value does he/she/it add?
iTunes only works with established record companies. They will not distribute indy music without one. I'm assuming the same goes for their book store, and I don't know what Amazon's requirements are.
Re: (Score:3, Informative)
... but I'm genuinely interested: What exactly does a publisher of e-books "publish"?
I'm serious. You've written the book, you've put it in whatever form you decided on.
Umm... this is the problem: "whatever form you decided on." Many if not most authors are incapable of putting a manuscript into a reasonably publishable format on their own.
Most authors still output some sort of error-ridden prose in MS Word. At a minimum, it needs someone to read through it and correct basic spelling, grammar, etc. mistakes. Also, someone to ensure consistency in format -- for example, if the manuscript uses citations, are they all the same format? etc. A good editor/publisher may
Quit crying (Score:2)
If you don't like Apple's censorship and their tight grip on their devices and marketplace, DON'T BUY FROM THEM.
"Furthermore, Apple requires that if you sell books through them that you absolutely cannot sell them for less through anyone else.
Uh....
Your what now? (Score:2)
Re:Your what now? (Score:4, Informative)
The role Apple and Amazon have with regard to ebooks sold through their respective roles is a combination of the role of retailer (in terms of being the person who sells directly to the customer) and distributor (in terms of being the person who buys directly from the publisher.)
The role of the publisher continues to be played by the existing publishers.
Re: (Score:2)
Sounds to me like Apple and/or Amazon are your publishers.
No, they are your retailers.
Whomever it is you're talking to?
The publisher is the entity responsible for editing and promoting your book.
Better option (Score:2)
What this means is that an eBook that the author was quite happy to sell for $2.29 or $2.49 is now going to cost you $2.99 from everybody.
Or it could make the book $1.99, right? Why is there an automatic round up? I don't see how this is really Apple's fault. Your publisher has the option to make it any dollar amount they want it to be, but they're choosing to make it cost more for the consumer, and they're using Apple as a scapegoat for it. How about this - everything that's over 2.50 gets rounded up to 2.99 and everything under 2.50 gets rounded down to 1.99 and split the difference? It's not like the means of production are any indication
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everything that's over 2.50 gets rounded up to 2.99 and everything under 2.50 gets rounded down to 1.99
What happens to something that's exactly $2.50?
99.95 (Score:3, Insightful)
Seriously, will this .99 and .95 thing ever die? Does anybody really look at a price-tag that says $4.99 and not just think in their head "$5"?
Re:99.95 (Score:5, Informative)
Apparently there's some research that indicates that people are actually slightly more likely to buy a $x.99 priced product over its $x+1 identical counterpart.
Even if it's just 0.01%, when you're looking at inventories as massive as Wal-Mart or Amazon, that can be a LOT of sales.
$4.99 = $4 (Score:5, Informative)
Seriously, will this .99 and .95 thing ever die? Does anybody really look at a price-tag that says $4.99 and not just think in their head "$5"?
Quite the opposite: a lot of people think $4. That's the whole point.
http://en.wikipedia.org/wiki/Psychological_pricing
I've caught friends doing this on a few occasions, and when I call them on it they do a sheepish "oh, yeah". :)
offtopic, but WTF is with .99 (Score:2)
Do marketers really think people haven't figured out that 2.99 is three dollars? Are they right?
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Do marketers really think people haven't figured out that 2.99 is three dollars? Are they right?
They do; they are. "No man ever went broke overestimating the ignorance of the American public" or that of any other large group of people, for that matter...
I'll stick to (Score:2)
Apple will have competition for eBooks... (Score:4, Informative)
and they hate that.
On the iPod they had no competition when selling content so they sold inferior content for higher prices then their competitors (who sold 192Kbps for $0.79, but never got far cause they couldn't license Apple's DRM).
They won't be able to repeat that trick for eBooks but their is a solution that allows them to avoid competing and continue selling things at Apple high prices: force the other retailers to raise their prices to Apple's levels. They can do this because of their clout and the new U.S. law that allows the publishers to enforce the recommended sales price. Actually, the publishers didn't mind and are happy to enforce the higher price now that they have a powerful ally.
This is primarily aimed at Amazon (though smaller publishers and consumers get hurt, of course) who could have competed on the iPad. Now, with everyone selling books on the iPad at the same price users are very likely to choose Apple because of the ease and the integration.
(If you think you detect some dislike of Apple, you are right. I have no personal interest in any of this, but I have grown increasingly disgusted by this company.)
.99 cent pricing (Score:2)
The publishers are more behind this than Apple (Score:5, Informative)
This wasn't even some crazy coup by Steve Jobs, it's in fact actually the standard publisher price. I heard the business model on Fresh Air this week and it's quite interesting.
Amazon has been taking a loss on almost every new ebook in their store. They did this to gain marketshare (they have about 80% of the ebook market) and hoped to make up the difference on kindles. The publishers feared that Amazon would demand lower prices from them over time since they have a huge marketshare and because Amazon wants to drive sales of kindles. Amazon is also trying to cut the publishers out by providing publishing services for books. The old publishers hate Amazon right now.
Along comes Apple and the iPad, and Steve basically made an agreement with publishers that they like. Steve doesn't compete on price, he competes with flash and glamour, and does to very well. The publishers in fact like the fact that there's more competition now, and that Apple has agreed to, for one year, a price structure favorable to what they want. Now Amazon will lose marketshare and be in a less favorable negotiating position and publishers can increase their prices again.
Yes Apple did agree to this, but besides the .99 thing, Steve could care less about the true price of the book. The price increases came from the publishers directly.
It's the 4/29/10 podcast of Fresh Air on NPR, check it out.
There's your problem. (Score:3, Informative)
I, for one, do not understand [...] just how Apple is making it better for the consumer this way."
Well, there's your problem. Apple's goal isn't to make things better for the consumer, it's to make money.
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Re:Apple tax is 30% for iPhone (Score:5, Informative)
which means the developer would get $700,000 without the requirements of setting up distribution and to a large extent marketing. Clearly you've never run a business and had to pay for sales, marketing, advertising and distribution expenses.
30% for built in exposure to 80 million potential customer and application distribution is actually pretty cheap. Plus it's a flat pay-as-you-go situation. Generally you have to pay for marketing sales and distribution channels up from and hope you make enough to cover your costs.
Personally I don't like Apple's schizophrenic approval process, but the model is brilliant.
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We could argue all day about 30% and how that applies to a website rather than a physical store, and how that relates to current consignment sales systems in the real world. However, doing so is just nitpicking. I personally believe that 30% for what apple is offering is a bit much. It's about 3x more than typical systems for similar services online. But then, apples store
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Like who? Handango for example are one of the main resellers of mobile apps for Symbian, Android Blackberry etc. They take 40%.
Re:Apple tax is 30% for iPhone (Score:5, Insightful)
I see the "Let's place an ad in the New York Times and we'll be rich because SO MANY PEOPLE READ IT" fallacy made it to the net intact.
Your "exposure" to 80 million customers is bogus. There are tens of thousands of apps - how many people are going to see YOUR app?
And the more apps in the closed store, the less that being in that closed store is worth.
Think of it - if everybody had 10,000 friends on facebook, it would become even more useless than it already is. You'd have to filter out 99% of it somehow.
Network effects don't scale when the amount of time a person has doesn't scale.
If it's such a great model, and the best way to get your apps sold, then why is Apple afraid to let people install stuff from outside the App Store? They should welcome inefficient competition as a way of demonstrating their superior approach - except that, like any pyramid scheme, it's only superior for those at the top.
Re:Apple tax is 30% for iPhone (Score:4, Insightful)
Re:Apple tax is 30% for iPhone (Score:4, Insightful)
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Compared to a web site hosting an installable .exe file? Really? I don't believe you.
Re:Apple tax is 30% for iPhone (Score:5, Insightful)
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You'd probably be wrong. You're competing for attention with tens of thousands of others in a limited store. The other person has the entire world to work with. Plus the freedom to develop their app using any technology they want - like flash, for example. It worked for youtube ...
They also have the opportunity to sell it as a service, and to continually add new features to grow the customer base. YOU, on the other hand, are competing in a market where everyone is either free or 99 cents to "get market s
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You're forgetting the transaction charges for credit cards/paypal. You're forgetting the cost of aquiring/developing/setting up your ecommerce system. You're forgetting that when your sales are already good on the App Store, the appearance on
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I'm well aware of the retail margins - and no, the publisher doesn't get $1 - $2 on a $50. A buck doesn't even cover the cost of packaging and production. Look in the trades - $10 to $20 is the norm on a $40-$50
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now its 42.99 according to jobs.